Adjustable Rate Mortgage: Loans with interest rates that can fluctuate during the term, based on an index to which the interest rate is tied.

Amortized Loan: A loan that is paid off in equal installments during its term.

Annual Percentage Rate: The amount a loan costs, paid yearly and expressed as a rate of costs over the loan itself.

Appraisal: An estimate of real estate value. The most important factor in determining its value is comparable neighborhood sales.

Assessments: A city determined tax on homeowners, used to pay for improvements to the city in which the homeowner lives.

Assumable Loan: A type of mortgage that allows the buyer to take over the responsibility of the mortgage on the encumbered real estate.

Closing Costs: Expenses incurred for the purpose of closing a real estate or mortgage transaction. Examples include: attorneys fee, recording charges, survey fee , title policies, lender fees, discount points, appraisal fee, et cetera.

Commitment Letter: A letter issued in the final stage of your loan process which includes the terms of your loan approval. Usually issued after all pre approval conditions have been accepted by underwriting.

Conventional mortgage:
A mortgage loan that is not insured or guaranteed by the federal government.

Contingency: A clause within a purchase agreement that has to be met before the contract can be exercised.

Down Payment: The initial payment on a home. There are certain minimums of down payments depending on the type of loan. Most down payments are 5 to 30 percent of the loan.

Earnest Money: Money that accompanies an offer made on a property. The money is then applied to the down payment at closing. If the offer is not accepted the money is returned. 

Equity: The difference between indebtedness and market value of a property.

Escrow: Funds, many times a bond, held by third party which will not be released to the grantee until conditions of a contract or an agreement are fulfilled.

FHA Loan: A Federal Housing Administration loan program that provides a guarantee against default. The borrower may benefit from smaller down payment.

Fair Credit Reporting Act: Information in your credit report that federal law gives citizens the right to challenge.

Fixed Rate Mortgage: Loans with interest rates that do not fluctuate.

Homeowner's Insurance: Insurance home buyers must have in order to protect the investment in the property.

Loan Origination Fee: A fee for loan application.

Loan Processing: The lenders opinion of your financial and credit past, combined with your income to calculate your ability to qualify for a loan.

Loan to Value Ratio: This is the ratio of the amount borrowed to the appraised value of the home.

Lock-In Agreement: This agreement allows you to lock in an interest rate at or anytime up to the closing. 

Mortgage Insurance: This insurance protects the investor from possible loss if the borrower defaults on the loan.

Multiple Listing Service (MLS): A service used by real estate agents to obtain information on homes and land for sale.

PITI: Principle, interest, taxes, insurance- Many mortgages are set up with monthly loan payments to include these.

Purchase Agreement: This is the agreement that legally binds the buyer and seller. All contingencies of the agreement must be listed here.

Title: Evidence of a person's legal right to the ownership of a property, usually in the form of a certificate or a signed contract.

Title Insurance: Insurance purchased to protect the lender and homeowner  against claims on the title from previous owners or encumbrances.

Underwriting: An analysis done by the lender to determine if you qualify for a loan.

Veteran's Administration Loan (VA Loan): These are loans available to US Veterans and their surviving spouses. The loans require no down payment and you can borrow the entire purchase price of the home.